Ministry of Defence Annual Report and Accounts 2010-11 report published

25 January 2012

The Defence Committee have described as "grotesque" that 40 per cent of planned military redundancies are to be compulsory while the MoD's current civilian redundancies will be entirely voluntary. The Committee publishes its report, today, into the MoD's Annual Report and Accounts 2010–11.

Armed Forces and civilian personnel

The Armed Forces redundancy programme is expected to deliver up to 11,000 redundancies across the three Services. Civil servant redundancies have a target of 15,000. The Permanent Under Secretary told the Committee that civilians are flexibly employable whereas the military are not. This runs contrary to the Committee's experience of the breadth of the military training and the skills shown by personnel as witnessed on operations.

Chair of the Defence Committee, Rt Hon James Arbuthnot, says,

"The stark and shocking differences between redundancies in the MoD require an exceptionally persuasive explanation, which we are yet to hear. Look at the areas where the Armed Forces are undermanned. Why cannot the MoD retrain Service personnel, who face redundancy, to fill those many trades where there are shortages, such as combat medical technicians or intelligence gatherers?"

MoD Resource Accounts 2010-11

For the fifth successive year, the MoD's Annual Accounts have been qualified. In 2010–11, the MoD did not comply with international financial reporting as laid down by the Treasury and has no plans to do so for the foreseeable future. The Committee is dismayed that the Chancellor of the Exchequer has not responded to its letter asking what his policy is on Departments who defy Treasury accounting rules. The MoD could also not provide adequate audit evidence for over £5.2 billion worth of certain inventory and capital spares. These problems are likely to persist until, at the very earliest, 2014–15.

Chair of the Defence Committee, Rt Hon James Arbuthnot, also says,

"The repeated qualification of the MoD accounts reflects badly on the MoD's financial management. The situation is unsatisfactory and the MoD and the Treasury need a clear plan to address the shortcomings in the MoD’s accounting systems."

The Committee is concerned that the level of theft and fraud in the MoD appear generally to be increasing year on year, and that the level of value recovered from theft and fraud is low. The MoD need to clarify the roles of the various police and security forces dealing with fraud and theft; provide further information on how the problems of prevention, detection and recovery are being managed and, in general, tackle this issue with a greater degree of vigour.